The ECB wasn’t the only game in town overnight. The Bank of England (BoE) also had its regular scheduled rate announcement. As expected, the BOE stayed the course, leaving current interest rates and asset-purchasing programmes untouched.
The situation in Europe has global reach, but its impact in the UK is especially significant. Uncertainty on the other side of the English Channel has been a very real drag on the British export market given the tough austerity plans many mainland European governments have adopted. This has put many barriers in the way of the British economic recovery.
The current round of British QE is expected to wrap up in November of this year. Given the precarious state of the UK economy, which never really fully recovered from global market shocks in 2008, many are looking for more stimulus to be added in November.
The minutes from August’s BoE meeting, released previously, showed that the topic of further QE was discussed, as was the subject of size and the details of how to administer it; though it must be noted that there is not unanimous agreement amongst committee members that adding to the QE programme is the way to go.
With this in mind, investors will be eyeing the minutes from this month’s meeting, which are not slated to be released until September 19th, for clues to what might happen after November.
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